Bankruptcy

Don't hit if it is at all possible to avoid hitting;
but never hit soft.
—Theodore Roosevelt

Bankruptcy

DODGING THE BANKRUPTCY BULLET

Debtor/Creditor Negotiations. Our clients are often creditors collecting on a defaulted note, a final
judgment or a delinquent account. Just as often, we represent troubled
borrowers, judgment debtors or corporations on the ropes. If a non-bankruptcy
solution exists, we will find it. In every case, we help our clients negotiate
the best outcome possible under the circumstances.

Insolvency Planning. Often the best way to avoid a bankruptcy is to plan for one. We help
our clients game out various legal scenarios, settlement possibilities,
and out-of-court work-outs. Such planning sometimes reveals that bankruptcy
is the most cost-effective solution to an otherwise insoluble problem.
Even in those cases, however, bankruptcy might be avoided by walking an
adversary through the analysis so that they can see the wisdom in offering
our client a negotiated way out.

Creditors Rights. A good creditors attorney gets the client paid as much as possible as
quickly as possible and at the lowest possible cost. Often, a judgment
or account debtor may reflexively threaten bankruptcy. We advise our clients
on whether a bankruptcy threat is credible, how a bankruptcy might affect
their interests, and whether not the best response is simply “bring
it on.” In short, we help our clients collect.

Loan Workouts. In many loan workouts, a bank vice president demands an immediate payment,
more security, a lock-box arrangement, and additional guaranties in exchange
for waiving a little default interest. A credible threat of bankruptcy
by a seasoned bankruptcy lawyer results in a successful out-of-court loan
workout. Our attorneys negotiate with lenders all year long, recession
after recession, achieving for our clients the best results possible under
the circumstances.

WHEN BANKUPCY IS THE BEST ANSWER

Complex Individual Bankruptcy Representation. An individual’s case often involves valuable real estate, contentious
litigation, aggressive creditors, and large, potentially non-dischargeable
debts. Individuals with complex legal and insolvency issues require a
sophisticated attorney to plan and execute well-conceived and custom tailored
strategies in Chapters 7, 11, and 13. Our bankruptcy attorneys are all
certified specialists in bankruptcy law by the State Bar of California
Board of Legal Specialization and each has decades of experience advising
clients in complex individual bankruptcy cases.

Classic Chapter 11 Business Reorganizations. In business bankruptcy cases, lawyers for secured lenders taxing authorities,
tort creditors, suppliers, employees, and equity holders jockey for the
best deal for their clients. To succeed, a company must be well-advised
on realistic goals and cost-effective strategies. We help our debtor clients
design and implement the best reorganization strategy for their companies.
For our creditor clients, we ensure that their decisions are informed
and that their interests are protected. We also represent officers, directors,
and insiders whose personal interests may be in conflict with the interests
of their corporations.

Tactical Bankruptcies. While a classic Chapter 11 case results in a confirmed plan, a client’s
goals are sometimes more immediate and tactical, like bringing a stubborn
creditor to heal, avoiding a costly appeal bond, obtaining a more favorable
forum, or wiping away a burdensome attachment or levy. Often, the dynamics
underlying the dispute are sufficiently altered by the bankruptcy case
that settlement becomes possible. We help our clients determine whether
a tactical bankruptcy is likely to achieve their goals.

Entertainment Industry Bankruptcy Representation. We work with closely with entertainment attorneys and business managers
to help our industry clients, artists, writers, and professional athletes
confront their legal and financial predicaments. Our clients include well-know
actors facing a large judgments, production companies in danger of losing
their film library to a creditors, producers sued on a “pay or play”
deals, rock stars cheated by a former business managers, pop divas in
disputes with their record labels, and highly compensated athletes with
even higher debts. As often as not, entertainment industry bankruptcies
are about breaking negotiating log jams. We help our clients implement
the solutions that bankruptcy makes possible.

High Profile Debtor Bankruptcy Representation. A bankruptcy can generate publicity. How the case and resulting publicity
is managed can often mean the difference between a successful outcome
and a pyrrhic victory. From inception, we handle high-profile clients
with this in mind. Disclosures are made carefully, not reflexively. We
don’t respond to calls from the press unless instructed to do, and
we arrange for discreet entrances and exits when necessary. We are keenly
aware that what may be in the client’s best legal interests, may
not be in the client’s best overall interests. For that reason,
frequent consultation with high-profile clients and their other professionals
is the norm.

Real Estate and Shopping Center Bankruptcies. Commercial property values fluctuate. Special rules govern “single
asset” real estate cases and cases involving shopping center leases.
We lay out for our real estate clients all of the options so that they
can make the best decisions for their companies and their families.

Fashion Industry Bankruptcy Representation. When a fashion industry company is forced into bankruptcy, its lender
may accuse the principals of borrowing base manipulation. Expensive and
risky litigation often ensures. We help our clients to avoid such litigation
whenever possible and to achieve the most favorable outcomes in court
whenever necessary.

LITIGATION INSIDE BANKRUPTY CASES

We represent clients in adversary actions throughout California and around
the country. We also serve as local counsel to out of state law firms
in litigation matters in Southern California bankruptcy courts.

Non-Dischargeability Litigation. Creditors may seek to have a debtor’s discharge denied or the have
a debt exempted from discharge, by alleging fraud or other of malfeasance
in litigation commenced within a bankruptcy case. Such “adversary
actions” can be hard-fought and complex. Parties on both sides of
such cases benefit from experienced bankruptcy litigation counsel to bring
the matter to a successful conclusion. Our attorneys are particularly
experienced in handling difficult non-dischargeability litigation and
related appeals.

Fraudulent Transfer Litigation. When bankruptcy rears its head, creditors and bankruptcy trustees will
scrutinize transactions to ensure that fair value was received, especially
transactions involving principals and affiliates. Sometimes a creditor
or trustee will fight to have several years' worth of loan repayments
declared illegal dividends, subjecting an insider or corporate affiliate
to serious financial jeopardy. We evaluate such claims and represent our
clients’ interests vigorously to achieve the best possible outcomes.

Preferential Transfer Defense. Bankruptcy law allows trustees recover “preferential” payments
made to legitimate creditors, even when substantial sums are still owed.
Merely having been owed the money received is not a defense to a preference
lawsuit. However, creditors may have obscure statutory defenses to a trustee’s
repayment demands. We help our clients evaluate and prove the viability
of preference defenses.

ASSET SALES IN BANKRUPTCY

Buying assets in a bankruptcy case is a tricky business. There are no warranties,
no guaranties, and there is no recourse if things don’t turn out
how they should. Smart buyers negotiate safeguards designed to protect
their interests and to increase the likelihood that they will be the successful
bidders. Smart creditors work to strip transactions of bid-chilling conditions
and break-up fees, while bankruptcy trustees and debtors-in-possession
play each against the other to encourage a stalking horse bidder and to
increase the likelihood of overbids. We help our clients through the bankruptcy
sale process so that they participate with their eyes wide open, fully
informed about the opportunities and risks of purchasing property in a
bankruptcy sale.

ASSIGNMENTS FOR THE BENEFIT OF CREDITORS

Assignments for the benefit of creditors or “ABCs” are the
state law analogue to business bankruptcy cases. In the right circumstances,
an ABC can provide for the assets of a business, including its goodwill
and going concern value, to be transferred quickly to a third party, free
and clear of creditor claims, without the stigma of bankruptcy, and at
a fraction of the cost of a Chapter 11. We represent assignors, assignees,
and creditors in California ABCs and in related state court litigation.